Oil stabilises after sharp drop on demand concerns

New Delhi, Apr. 18 (BNA): Oil prices were little changed after a 3% drop in the previous session as the market remains concerned about demand this year.

 

Brent futures were up 13 cents, or 0.15%, at $87.42 a barrel, while U.S. West Texas Intermediate (WTI) crude futures traded 6 cents higher, up 0.07%, at $82.75 a barrel at 06:36 GMT.

 

The two benchmarks slid 3% in the previous session on signs that fuel demand this year is lower than expected amid flagging economic growth in China and as oil inventories in the U.S., the world’s biggest crude consumer, rose, Reuters reported.

 

Analysts at JP Morgan highlighted in a note late on Tuesday that worldwide oil consumption so far in April has been 200,000 barrels per day (bpd) below its forecast, averaging 101 million bpd. From the start of the year, demand has risen by 1.7 million bpd, down from its forecast in November of 2 million bpd.

 

Surging U.S. crude inventories also kept a lid on prices. Oil inventories rose by 2.7 million barrels to 460 million barrels in the week ending April 12, the Energy Information Administration said.

 

Stockpiles were built as refinery utilization declined at a time when processing typically rises ahead of summer, driving demand in the U.S.

 

Gasoline stocks fell by 1.2 million barrels in the week to 227.4 million barrels, the EIA said.

 

Distillate stockpiles, which include diesel and heating oil, fell by 2.8 million barrels to 115 million barrels, versus expectations for a 300,000-barrel drop, the EIA data showed.

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